Overview

Understanding the different categories of business expenses is essential for proper tax planning and maximizing deductions. This guide breaks down common expense categories and explains what typically qualifies under each.

Furniture & Equipment

• What qualifies: Office furniture, work-specific equipment, storage solutions
• Documentation needed: Receipts showing purchase date, cost, and business purpose
• Key considerations: Items over $2,500 may need to be depreciated rather than expensed
• Tax tip: Section 179 may allow you to deduct the full purchase price of qualifying equipment in the year it was purchased

Office Supplies

• What qualifies: Paper, pens, printer ink, stationery, shipping materials
• Documentation needed: Receipts showing purchase details
• Key considerations: These are generally fully deductible in the year purchased
• Tax tip: Create a system to track even small purchases as they add up over time

Transportation

• What qualifies: Business mileage, vehicle maintenance (business portion), parking, tolls
• Documentation needed: Detailed mileage log with dates, destinations, and purpose
• Deduction methods:
  • Standard mileage rate (67¢ per mile for 2024)
  • Actual expense method (calculate business percentage of total costs)
• Tax tip: Commuting from home to your regular workplace is not deductible

Meals

• What qualifies: Business meals with clients, prospects, or colleagues
• Documentation needed: Receipt plus record of who attended and business purpose